(Yicai) Dec. 1 -- CSI Solar’s shares sank after the Chinese photovoltaic panel maker said it plans to transfer three overseas factories that supply the US market to its parent company Canadian Solar so as to de-risk its operations.

After sliding by as much as 8.3 percent in Shanghai earlier today, CSI [SHA: 688472] closed down 6.9 percent at CNY16.01 (USD2.26) per share.

CSI will set up two joint ventures with Canadian Solar: one for its US solar business and one for its US energy storage business, the Suzhou-based company announced yesterday. Canadian Solar will own 75.1 percent of each JV, which will run the assets through a leasing model.

The three facilities to be injected into the JV are a solar wafer plant, a battery factory, and an energy storage manufacturing site that is still under construction.

The move is intended to support the company’s long-term presence in the US market, keep operations running smoothly, lower business risks, and better protect the interests of the firm and its shareholders, CSI noted.

CSI will receive a one-off payment of CNY352 million (USD49.8 million) based on an asset valuation of CNY469 million, and will enjoy returns of 25 percent, it said.

Following the deal, Canadian Solar will focus on the production, sale, and services of solar modules and energy storage systems in the US market, targeting local public utilities, power companies, and large commercial and industrial projects, while CSI will concentrate on global markets outside the US, including Europe, Latin America, Asia, and the Middle East.

CSI also plans to provide Canadian Solar with a counter-guarantee limit of no more than CNY44.6 billion (USD6.3 billion) to support the latter in providing performance and financing guarantees for CSI and its holding subsidiaries.

CSI entered the US market in 2015 by acquiring local PV power plant developer Recurrent Energy. It invested USD250 million to build a 5-gigawatt panel factory in Texas in 2023, which started production that year. Also in 2023, the firm said it would spend USD839 million on a 5 GW battery factory in Indiana, with plans to start output this year.

In September last year, CSI further announced a USD712 million investment to establish an energy storage battery factory in Kentucky.

CSI had third-quarter revenue of CNY31.3 billion (USD4.4 billion), down 8.5 percent from a year earlier, ranking fifth among its 23 Chinese competitors. Net profit shrank 49 percent to CNY989 million, ranking it second.

Editor: Futura Costaglione